* SSE to raise prices by 8.2 pct next month
* Fuels political row over rising cost of living
* Other suppliers likely to follow
By Paul Sandle and Kate Holton
LONDON, Oct 10 British energy supplier SSE
inflamed a growing political row over the rising cost of
living on Thursday when it hiked prices by more than three times
the rate of inflation.
The leader of the opposition Labour Party put increasing
energy bills at the heart of his campaign for the 2015 election
last month when he said he would freeze prices for 20 months if
his party wins power.
Energy prices have risen 24 percent over the last four
years, according to regulator Ofgem, ramping up the pressure on
household finances at a time of wage stagnation.
An 8.2 percent price rise on Nov. 15 will add more than 100
pounds to average annual bills for SSE's customers taking both
gas and electricity, pushing charges up to 1,380 pounds ($2,200)
"This is a crippling blow for consumers," Ann Robinson at
comparison site uSwitch.com said. "Adding a further 111 pounds
to an already sky-high energy bill will leave consumers buckling
under the pressure."
SSE, the first of the "big six" suppliers to raise prices
ahead of the winter, said it needed to counter the increasing
cost of buying wholesale energy, paying to deliver it to
customers' homes and government-imposed levies.
Labour leader Ed Miliband's pledge to freeze prices before
launching a full restructuring of the market helped expand his
lead over Prime Minister David Cameron in opinion polls. One put
his advantage at 11 points shortly after the announcement.
The government dismissed the idea as a socialist gimmick
that would hurt the industry and send out a signal that Britain
The impact on the utility firms of Miliband's promise was
dramatic. Shares in the London-listed utilities SSE and Centrica
lost a combined 2.7 billion pounds in market value in
two days after the announcement.
Labour said on Thursday that hard-pressed consumers were
paying the price for Cameron's failure to stand up to the energy
"We need an energy market which works for ordinary families
and businesses," Miliband said on Twitter, as he pushed his
argument that Labour had the policies to rein in the rising cost
Energy minister Michael Fallon told Sky News he was
disappointed with SSE's price hike and urged customers to
examine whether they could switch to a cheaper tariff.
SSE was also the first to raise prices last year, although
it was followed within days by the market-leading gas supplier
British Gas, part of Centrica and RWE npower, owned by Germany's
RWE AD. Rival Eon said on Thursday it
had no current plans to raise its prices.
Iberdrola's Scottish Power and EDF Energy
make up the remaining members of the big six firms.
SSE, formerly known as Scottish and Southern Energy, said
raising prices for its 2.9 million gas and 4.4 million
electricity customers not on fixed tariffs was "the last thing
the company wanted to do", and it pledged not to raise prices
again before Autumn 2014 at the earliest.
"We're sorry we have to do this," said Will Morris, group
managing director retail.
"We've done as much as we could to keep prices down, but the
reality is that buying wholesale energy in global markets,
delivering it to customers' homes, and government-imposed levies
collected through bills - endorsed by all the major parties -
all cost more than they did last year."
The company, which said it had a profit margin of 4.2
percent in its energy supply business in 2012/13, shifted the
blame for the price rises onto the costs of environmental and
social policies pursued by both the Conservatives and their
Liberal Democrat coalition partners.
It said politicians could help consumers by transferring the
costs from the energy bill payer to the taxpayer, which would
immediately take 4 billion pounds off UK energy bills.
"We know we will come in for a great deal of criticism for
this decision and politicians will no doubt be lining up to
condemn us," Morris said.
"But over many years policymakers themselves have failed to
highlight adequately the cost to consumers of the policies they
have pursued in government," he said, in reference to upgraded
networks and power stations.
The move by SSE lifted sentiment around the whole sector,
with shares in Centrica up 1.4 percent and shares in SSE up 1.3